If you live in rural USA you may have noticed a new trend. You have probably seen people living out of barns. No, not a traditional barn but a fancy barn. In the insurance industry, they are referred to as barndominiums but I’ve also heard barndo or shouse. If you know someone that has recently built one, you may know they can be difficult to insure. What is a barndominium and let’s review why they are different to insure.
What is a Barndominium?
A barndominium is a mix between a house and a barn. Instead of having a home with a detached pole barn, these buildings put the two structures together. It adds the convenience and size of a barn and adds it as part of the structure. There are several factors that also make them different from a traditionally built home.
They are usually built with metal construction due to the barn which adds a rustic style to the home. Additionally, there is an open layout and the entire barndominium is incredibly customizable. Plus with the barn attached to the home and the simplicity of them, the cost to build can be lower. It’s a quicker build and the homeowner can save on labor costs and also customize the home to fit their budget and needs. While there are many pros to these homes, they can be difficult to find insurance for.
Why is Insuring a Barndominium Challenging?
While a barndominium is very similar to a traditionally built home, insuring them can be much more difficult. There can be several reasons why insurance companies are hesitant to insure these structures.
The primary reason is that these homes are non-standard construction, which means they lack historical data. These homes are built differently with their metal construction and there isn’t much data on these homes from an insurance standpoint. Insurance is entirely based on data and how carriers interrupt that data guides them in making decisions. For barndominiums, there’s little data there and many carriers are hesitant to insure them. At the moment, it’s too big of a risk for them and some decide not to insure them at all.
In addition to the lack of historical data, these homes oftentimes come with commercial or farm exposure. Due to the barn and style of home, many times it’s business owners with equipment or farmers building these homes. Many personal home insurance companies then prefer for these homes to be insured on a commercial farm policy instead. While this is often the case, it is not the truth in all circ*mstances. Lastly, the location of these homes is often rural. Insurance carriers want to know how far your home is from the responding fire department. The combination of a rural home and non-standard construction is too much for some carriers to consider the risk.
Where do I find insurance on my Barndominium?
You came to the right place to find insurance! Working with an independent agency like us is the best place to start as we represent several insurance companies. Our knowledge and experience allow us to know which options will fit your needs best. Here at Hitchings Insurance, we are an independent agency and we only represent A-rated companies in the insurance industry. There are several carriers we work with that will insure barndominiums. Contact us to review your insurance on your barndominium!
FAQs
While a barndominium is very similar to a traditionally built home, insuring them can be much more difficult. There can be several reasons why insurance companies are hesitant to insure these structures. The primary reason is that these homes are non-standard construction, which means they lack historical data.
What questions to ask when building a barndominium? ›
Questions to Ask Potential Builders
- Their experience with barndominiums.
- Construction loans.
- Any relevant certifications.
- Their past projects.
- Materials and techniques used.
- The warranties they offer.
Here are five key factors you'll want to know before breaking ground and turning your dream barndominium into a reality.
- Research your ZIP code. ...
- Look into financing. ...
- Interview builders. ...
- Plan for extra costs later. ...
- Consider insurance.
With Germania Insurance, we have unique coverage for barndominiums that Texans love. This new trend in construction involves constructing a residential space within the larger structure designed to be used as a barn.
Why can't you finance a barndominium? ›
Many USDA lenders are unfamiliar with these structures and may be reluctant to finance their purchase. Borrowers may also experience added difficulty when seeking a USDA construction loan to build a new barndominium, as some USDA lenders, including Neighbors Bank, do not offer this loan type.
What is the most expensive part of building a barndominium? ›
Steel framing, popular in barndominium construction for its durability and resistance to pests, can be more expensive than traditional wood framing. Framing costs can range from $20 to $50 per square foot, making it one of the most significant portions of the construction budget.
What is the downside to a barndominium? ›
Pros of barndominiums include a cheaper cost, fully customizable space, and lower maintenance. They're also highly durable with lots of extra room and are a more eco-friendly housing option. Meanwhile, cons include higher upfront costs, difficulties finding financing, and not all cities allow them.
What is the best foundation for a barndominium? ›
Properly executed, an embedded perimeter beam concrete slab foundation formulated from high strength 5,000 PSI concrete mix designs provides ideal structural support for the tremendous clear spans and dynamic live loads generated over generations of family life within your barndo.
Are barndominiums worth the money? ›
Barndominiums offer exceptional value on a per square foot basis, and are exceptionally beneficial for large families or when a business requires a large workspace. They also have lower insurance rates and taxes.
Is it possible to build a barndominium for 100K? ›
It is not an impossibility that you can build a barndominium for 100K. However, it is not too common. If you seek to go that route, you need to cut down on expenses and do most of the work yourself. You will need to find the right piece of land to erect your barndominium.
Interior + Exterior Design
All the finishing touches – drywall, paint, built-in furniture, moulding, roofing, siding, and fascia – can take 1 or 2 months, depending on the level of extravagance and detail. Minimalists will save time in this stage! All in all, most barndominiums take about 6 months to build.
Is it hard to sell a barndominium? ›
Selling a barndominium can present challenges, particularly regarding market perception and financing, but these challenges are not insurmountable. There is not much difference between selling a barndominium and marketing a custom-built home on today's market, the challenges are extremely similar.
Is it difficult to insure a barndominium? ›
Insurance can be complicated for barndominium homes. According to Barndominium.org, not all insurers cover barndos, especially if they're mixed-use instead of residential only, and those that do might have barndo-specific policies.
How much does a 2000 sq ft barndominium cost in Texas? ›
The average cost of a barndominium in Texas is $70 to $95 a square foot to build vs. the cost of a house is around $115 - $145 per square foot.
Do you pay property taxes on a barndominium in Texas? ›
The total property tax rate applied to a barndominium in Texas is the sum of the rates set by each local taxing unit where the property is located. These rates can vary significantly from one area to another, affecting the overall tax burden.
Are barndominiums bad investments? ›
As such, it is more difficult to assess the resale value of a Barndominium. Unlike modular homes and trailers, Barndominiums maintain their value and are likely to increase over time. If you are purely looking for a quick resale investment, a Barndominium may not be your best option.
Do barndominiums hold their value? ›
Barndominiums normally retain their resale value and may even increase in value gradually, although more slowly than a standard home. However, these homes are still rare in some parts of the country, and it may be challenging to get an accurate appraisal in an area where there are few.
